BiggerPockets Real Estate Podcast

Feb 2025 Housing Market Update: Are Our Predictions Already Wrong?

Feb 14, 2025

The housing market in 2025 is showing surprising resilience, with home prices continuously rising despite interest rates in the sevens. A Q1 update reveals shifting trends in mortgage delinquencies and inventory levels, prompting questions about potential price drops. One troubling metric could foreshadow market distress, while discussions about the stability of buyer demand add to the complexity. Experts also explore alternative investment strategies, emphasizing the adaptation needed to navigate this evolving landscape.

33:37

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Quick takeaways

Despite rising home prices and demand, inflation-adjusted figures reveal a stable market, emphasizing the importance of distinguishing nominal from real price movements.

An increase in housing inventory indicates a shift towards a more balanced market, potentially benefiting buyers with greater negotiation power despite ongoing high mortgage rates.

Deep dives

Current Housing Prices and Inflation Adjustment

Housing prices have increased significantly, showing a 4.8% rise year over year, which surpasses the long-term average appreciation rate of 3.4%. However, when adjusting for inflation, the real price changes indicate that prices are nearly flat, suggesting a closer alignment with inflation rates. This trend highlights the importance of understanding nominal versus real price movements in the housing market. Although many markets are showing price growth, the inflation-adjusted figures illustrate a nuanced picture of the market's health.

Intro

6min

Shifts in Housing Inventory: A Return to Normalcy

6min

Exploring Passive Real Estate Investment Alternatives

2min

Current Housing Market Analysis

12min

Q1 2025 Housing Market Overview and Emerging Trends

7min

The 2025 housing market has already defied most expectations, but a worrying “shift” could throw everything off track. Home prices keep rising in every major metro—even with interest rates stuck in the sevens. It seems that nothing can stop the wave of demand hitting home sellers even as affordability reaches lows we haven’t seen in decades. But what could be the housing market’s kryptonite—the one thing that could lead to lower prices and distress in the market?

Today, we’re giving you a Q1 housing market update with the latest data coming in from January 2025, sharing must-know metrics about home sales, prices, mortgage rates, buyer demand, and even mortgage delinquencies.

Is Dave already off on his 2025 housing market predictions? He could be, as housing has seen unexpected strength despite last year’s big election, inflation rising once again, and interest rates more than double what they were just a few years ago. Will we see mortgage rates (and prices) drop at any point this year? What’s the one thing that could flip this housing market? We’re getting into the mystery metric you MUST watch to know what’s coming next.

In This Episode We Cover:

A Q1 2025 housing market update: prices, rates, demand, inventory, and more!

One troubling metric that could spell pain for the housing market in 2025

The markets where inventory is exploding, but does that mean prices will fall?

Is there a chance that mortgage rates will drop this year, or has the Fed paused for good?

The often overlooked (and cheap!) real estate markets seeing sizable home price appreciation

And So Much More!

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